ELIAS: The murky future of redevelopment agencies

It's fair to say they did it to themselves. The future of
California's more than 400 municipal redevelopment agencies is
completely unclear today, more than one month after Gov. Jerry
Brown signed a budget-enabling bill that threatened to eliminate
them.

Redevelopment agencies, usually called simply RDAs, previously
existed unmolested since the 1960s, thriving on something called
"tax increment financing." Simply put, that mean RDAs accomplished
their ends by declaring some parts of their cities "blighted," then
buying up that land and in turn selling it off to developers. The
developers built everything from shopping malls to low-income
housing projects to industrial buildings and professional sports
arenas such as Staples Center in Los Angeles and entertainment
complexes such as the one across the street from Staples.

The RDAs then pocketed the difference between property taxes
paid before the blight declaration and those on the new
developments and used the money for a variety of city projects,
plus many new land purchases. Whoever might have lived in the
"blighted" areas was basically on their own when it came to finding
new quarters.

Even in times when state and city governments and public schools
were strapped for money, the RDAs had plenty. When their continued
existence was first questioned just after Brown returned to the
governor's office last January, they quickly earmarked several
billion dollars for future projects, some of them completely
unspecified. They also borrowed an additional billion or so via
bonds. So big has been their money pool that the month-old state
budget counts on an annual infusion of $1.7 billion from RDAs as a
key balancing method.

But RDAs may not be dead, after all. Not only are many of the
city governments (city council members often double as RDA board
members) that protested their elimination contending in court that
it was illegal for Brown and the Legislature to wipe them out, but
another budget-enabling bill allows RDAs to resurrect themselves
---- if they contribute more to public schools.

All each has to do is fork over to the state's general fund a
share of the same $1.7 billion that the budget law would otherwise
seize and continue contributing heavily in future years, with the
money earmarked for education. Brown and lawmakers justify this by
contending that RDA money is often misspent on projects that
benefit private developers. One example: A list of projects set out
earlier this year by the Los Angeles Community Redevelopment Agency
set aside $52 million for a parking garage next to an art museum
now being built by wealthy developer Eli Broad (He's the B in KB
Homes) to house his art collection and make it viewable by the
public. The same list had only $32 million in projects for all of
the poverty-riddled South Los Angeles area, including districts
such as Watts.

Even though they're suing, most RDAs may eventually take the
alternative offered in the resurrection bill. Some are already
paying up. After all, in the maneuvering that preceded passage of
the RDA elimination measure, the agencies offered to contribute
hundreds of millions of dollars this year to ease state budget
woes, with somewhat lesser amounts to come in subsequent years.